The value of any diamond is calculated based on the four most essential criteria: carat, colour, clarity and cut, or the Four Cs. This is a universal diamond grading system which was developed by GIA (Gemological Institute of America) in the mid-twentieth century to help industry professionals objectively compare and evaluate diamonds. The 4 Cs are the very basics, they are very easy to understand and applicable to any diamond, whether rough or cut. When you've understood the concept of the 4 Cs, you will easily judge the quality of a given diamond, compare it with others, and assess how much it's worth, or in other words its fair market price value. Furthermore, if you're buying a very expensive diamond ring, it is essential that you be able to read a GIA certification that comes with each certified diamond you see. Once you're through with this section you will be able to understand diamond certificates as they show you the precise grading for each of the 4 Cs.
Of all the 4 Cs, carat weight is the most significant factor with regard to value, and consumer preference. As the carat weight, or the diamonds physical weight, increases so does its rarity as well as its price. Therefore, a 2-carat diamond is about three times more valuable than the same quality diamond of 1 carat. One carat equals 1/5 gram, therefore, 5 carats equals 1.00 gram. The carat is further subdivided into 100 points, just like one pound is made up of 100 pence. So a diamond of .55 points weighs .75 carats. The carat-weight of a diamond is the easiest and most objective measurement to determine, as it involves no comparisons, estimates or judgements.
Diamonds naturally occur in every colour of the rainbow. However, the closer a diamond is to being white or colourless, the more rare and valuable it is. This is because a totally colourless diamond makes it easier for light to pass through it, which results in the light being reflected as the colour of the rainbow. With this in mind, the GIA rates diamond colours from D (colourless) to Z (light yellow). There are also coloured or fancy diamonds that are both extremely rare and expensive and have their own grading system. We will cover this subject in more detail later in the Coloured Diamonds section.
All people have individual traits, even one-egg twins cannot be totally identical, and neither can two diamonds. They naturally form deep underground under extreme pressure and heat, and most contain their birthmarks, that is, internal or external imperfections, also known as inclusions and blemishes, respectively. The fewer imperfections a diamond has, the more beautiful and valuable it is. The GIA rates a diamond's clarity from "Flawless" [VVS (Very, Very, Small), VS (Very Small), SI (Slightly Included)], to I (Included). Usually, clarity characteristics are invisible to the naked eye until reaching the lower SI to I grades.
Most people tend to mistake cut for a diamond's shape. However, cut refers to the proportions and finish of a given diamond as opposed to its shape (Round, Marquise, Princess, Pear, etc.) Regardless of its initial shape, every diamond gets its ultimate fire and brilliance by cutting and polishing its facets to ensure the maximum amount of light being reflected and dispersed through its top. The cutter's ultimate goal is to achieve the greatest optical beauty while trying to retain the largest size of the diamond. Of the 4 Cs, cut is the only one dependent on a human contribution. Cut can be graded as Ideal, Premium, Very Good, Good, Fair and Poor. Generally, you should look for an Ideal to Very Good diamond. If you shop on a budget, go with Good.